Speaker

James J. Mulva Chairman, President and CEO ConocoPhillips

At Tuesday's luncheon, Daniel Yergin, IHS CERA Chairman, welcomed keynote speaker James J. Mulva, Chairman, President, and CEO of ConocoPhillips, to CERAWeek 2010. Mr. Mulva opened with a reference to Dr. Yergin's Pulitzer Prize-winning book, The Prize, stating that it illuminated the fundamental truth that oil is a precious commodity fueling the global economy. He went on to say that if oil is "The Prize," then natural gas is "The Gift" because it has emerged as an abundant source of energy that will become an integral part of the national and global energy future. Mr. Mulva characterized the comparative advantages of natural gas as its cleanliness, abundance, and reasonable cost and noted that gas is the critical reserve fuel that enables renewable, intermittent energy sources like wind and solar to be viable.

Mr. Mulva cited two major obstacles to gas's taking its rightful place as a fuel of choice in the global energy economy. First, gas must overcome the opposition of "hydrocarbon deniers," whom Mr. Mulva described as well-intentioned people who "support renewables at any cost and oppose hydrocarbons at any consequence." Mr. Mulva commented that their specific grievances over economic reliance on hydrocarbons--price volatility, environment impact, and greenhouse gas emissions--may sound compelling at first, but he encouraged the audience to think critically about the obstacles to successfully deploying renewable energy sources and reconsider the benefits of gas.

Second, Mr. Mulva emphasized that the US government must establish coordinated energy policies that engender certainty throughout the years, regardless of changes to the balance of political power. As an example he explained that the current US government policy strongly supports renewable energy but also proposes higher taxes on natural gas--the very fuel that has the potential to become an essential hydrocarbon backstop for renewables. Mr. Mulva also pointed out that although the US government holds 2.4 billion acres of mineral estate, it has leased only 3 percent for energy development. He encouraged the audience to consider the implications of that fact given that the revolution in unconventional gas development that has become a game changer for the US gas market in recent years occurred primarily on state- and privately owned territory.

After Mr. Mulva's speech, Dr. Yergin asked him about the role of the oil and gas industry in the US economy. Mr. Mulva explained that millions of jobs in the United States are related to oil and gas and that further development of natural gas could create even more jobs at a time when the United States is grappling with high unemployment. Dr. Yergin then asked Mr. Mulva about how ConocoPhillips values oil and gas: "Do you see Conoco as an oil and gas company or a gas and oil company?" Mr. Mulva replied that ConocoPhillips is focused on upstream exploration. When the company drills wells, it hopes to discover large reserves, either oil or gas.